Correlation Between Duluth Holdings and Greenlane Holdings

Can any of the company-specific risk be diversified away by investing in both Duluth Holdings and Greenlane Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Duluth Holdings and Greenlane Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Duluth Holdings and Greenlane Holdings, you can compare the effects of market volatilities on Duluth Holdings and Greenlane Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Duluth Holdings with a short position of Greenlane Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duluth Holdings and Greenlane Holdings.

Diversification Opportunities for Duluth Holdings and Greenlane Holdings

0.64

Correlation Coefficient

Duluth Holdings  Greenlane Holdings

Poor diversification

The 3 months correlation between Duluth and Greenlane is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and Greenlane Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlane Holdings and Duluth Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Duluth Holdings are associated (or correlated) with Greenlane Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlane Holdings has no effect on the direction of Duluth Holdings i.e., Duluth Holdings and Greenlane Holdings go up and down completely randomly.

Pair Corralation between Duluth Holdings and Greenlane Holdings

Given the investment horizon of 90 days Duluth Holdings is expected to under-perform the Greenlane Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Duluth Holdings is 9.31 times less risky than Greenlane Holdings. The stock trades about -0.06 of its potential returns per unit of risk. The Greenlane Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  535.00  in Greenlane Holdings on September 20, 2024 and sell it today you would lose (378.00) from holding Greenlane Holdings or give up 70.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Duluth Holdings  vs.  Greenlane Holdings

Duluth Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duluth Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Greenlane Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenlane Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Duluth Holdings and Greenlane Holdings

The main advantage of trading using opposite Duluth Holdings and Greenlane Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings position performs unexpectedly, Greenlane Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Greenlane Holdings will offset losses from the drop in Greenlane Holdings' long position.

The idea behind Duluth Holdings and Greenlane Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.